RIL-Disney deal: What do charts suggest for media & entertainment stocks?

A day after Reliance, Viacom18 and Disney announced a mega joint venture, RIL traded firm, while shares of TV18 group hit the 5% lower circuits. Here's a quick chart check.

Shares of media & entertainment related firms were in limelight on Thursday after the Mukesh Ambani led Reliance Industries, Viacom18 Media and The Walt Disney entered into an agreement to create an $8.5 billion (Rs 70,352 crore) entertainment giant in India.

As part of the transaction, the media undertaking of Viacom18, a RIL group company, will be merged into Star India Private, a Disney-owned firm, through a court approved scheme of arrangement. READ MORE

This morning on the bourses, Reliance gained 2 per cent, while the TV18 group stocks such as TV18 Broadcast and Network18 hit the 5 per cent lower circuits. Among others Entertainment Network (India) advanced 2 per cent.

Here's a quick chart check on these shares for the likely future trajectory.

Reliance Industries (RIL)

Current Price: Rs 2,940

Support: Rs 2,929

Resistance: Rs 3,000

Downside Risk: 6% 

RIL is unlikely to witness any run-away rally at the current juncture, as the key momentum oscillators are in favour of a downtrend. The stock, however, is seen fighting hard to sustain above its 20-DMA (Daily Moving Average) which stands at Rs 2,929. 

Break and sustained trade below the 20-DMA, can trigger a fall towards the Super Trend Line support at Rs 2,850 or deeper down to the 50-DMA at Rs 2,775. On its way, the stock is expected to face considerable resistance around Rs 3,000-mark, as momentum oscillators on the weekly chart too are showing signs of tiredness.

Having said that, the long-term trend for the stock is likely to remain positive as long as the stock sustains above Rs 2,800 level on a monthly closing basis. CLICK HERE FOR THE CHART

TV18 Broadcast

Current Price: Rs 59.55

Support: Rs 56.10

Downside Risk: 13% 

With today's fall, the TV18 is seen testing support at its 50-DMA, which stands at Rs 59.40. On its way down, the stock is likely to seek support around its Super Trend Line at Rs 56.10.

The overall trend for TV18 remains optimistic as the stock trades firmly above its key moving averages backed by positive momentum oscillators on the long-term charts. In case of a sharp fall, the stock is likely to find considerable support in the Rs 54-52 range. CLICK HERE FOR THE CHART 

Network18

Current Price: Rs 107

Support: Rs 104.90; Rs 102.60

Downside Risk: 11% 

Shares of Network18 were seen quoting below the 20- and 50-DMA, which stand at Rs 112.90 and Rs 109.30, respectively. The stock has near support at Rs 104.90, whereas the overall trend is likely to remain positive as long as the stock sustains above Rs 102.60.

Having said that, sustained trade below Rs 105, can dismantle the positive bias and the stock could potentially slide to Rs 95-odd levels. CLICK HERE FOR THE CHART

Entertainment Network (ENIL)

Current Price: Rs 327

Support: Rs 306; Rs 281

Upside Potential: 33% 

ENIL rallied nearly 90 per cent post its breakout at the start of this calendar year. The price-to-moving averages action remains favourable for the stock. Presently, the stock is trading close to its 20-DMA at Rs 306, which may act as an immediate support. 

However, in case, the 20-DMA fails to hold, the stock could the slip towards its next support at Rs 281 levels. On the upside, the stock seems on course to test Rs 434-odd levels. CLICK HERE FOR THE CHART